This question pertains to all bonds, but the question came to mind with the recent Puerto Rico Bond Selloff.
It seems these bonds are insured.
When Trump made the comments, the bonds fell to 30 cents on the dollar (according to the headlines), and the stocks of the bond insurers who are on the hook for the money also fell .
that doesn't make sense. they shouldn't both fall, as there are really only two scenarios: 1. either the bonds simply won't get paid, and only they should fall in price. OR 2. the bonds will get paid by the insurer, and so only the bond insurer stocks should fall. the bonds themselves should not selloff.
Whats the deal ??
Submitted October 08, 2017 at 11:26AM by speech_wood_82 http://ift.tt/2y91OiJ
